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Thursday, June 20, 2013

Herbert Hoover and the Crisis of the Old Order

 (Editor’s note:  This is the first segment in a three part series.)

Some say the best measure of a society’s worth is how it treats its weakest members.  Adversity is revealing...

It’s easier in a sporting event.  Not long after the final seconds tick off the clock, the winning team receives a ticker tape parade through the canyons of --- and keys to --- The City.  The loser, in turn, must accept a bitter pill, the consolation prize of measured reflection.  Where did it all go wrong?  How do we improve our chances of success next time?  In the sports with the good sense to provide a level playing field, a team can and does live to fight another day.  Never is there consideration of whether there will be food enough to eat on the night of defeat.

In a free, democratic society that puts all its eggs in the economic basket of capitalism based on the British model, somehow it’s just not as simple. But the ordinary citizen has come a long way. Trials, tribulations and progress in the pursuit of happiness – real victories - can be quantified with consensus objectivity.

Let’s put economic considerations aside for the moment. It may have cost the nation almost 650,000 lives, but we were finally able to correct the one gaping injustice of our social contract. The simple idea of extending constitutional protection to the black man came to pass. About half a century later, women were granted the full right of participation in the voting booth. In another half century, due process and equal protection of the laws gave these basic civil rights some teeth. Today, we are yet another half century removed.

In economic terms, the Republican administrations of 1920-1932 represented the climax of total cooperation between big business survival of the fittest and laissez-faire government in partnership. A period of unprecedented material prosperity, especially for private business interests, culminated during the 1928 presidential campaign. Then candidate Herbert Hoover had stated that “We in America today are nearer to the final triumph over poverty than ever before in the history of any land” and “given a chance to go forward with the policies of the last eight years, we shall soon with the help of God be in sight of the day when poverty will be banished from this nation.” Stock prices were reaching what had looked like a permanently high plateau.

Upon Mr. Hoover’s election it was being said that national leadership could not be in safer or more expert hands.  Respected economists noted that for the first time in the nation’s history “we have a President who, by technical training, engineering achievement, cabinet experience, and grasp of economic fundamentals, is qualified for business leadership.”  For his part, President Hoover in his March 1929 inaugural address stated that “I have no fears for the future of our country.  It is bright with hope.”

No one, perhaps, was better suited to anticipate catastrophe than President Hoover.  Following a successful entrepreneurial career with an engineering background in the private sector, he served for almost eight years as Secretary of Commerce before ascending to the presidency.  This provided him with a unique opportunity to observe the workings and influence the policies of the American business system.  But seeing all problems from the viewpoint of business, the federal government which he now headed “had mistaken the class interest (of business) for the national interest.  The result was both class and national disaster.”

In late October 1929, a matter of just a few months following President Hoover’s inauguration, the stock market crashed, ushering in the greatest economic downturn in US History.  The Great Depression lasted a full, painful 10 years.  How bad did it get?  One statistic is telling.  The unemployment rate rose from 3% in the first year to 9% to 16% to an astonishing 24% in the fourth and final year of the Hoover presidency.  That’s a lot of vanquished ordinary people.  When asked whether he felt the capacity for human suffering to be without limit, a banker reportedly replied, “I think so.”  Invoking moral justification, many conservatives regarded federal aid to idle workers as spelling the end of the republic.

Consistent with these sentiments, President Hoover reminded the ordinary citizen of what had become the basic philosophy of the Republican Party: The Great Depression was nothing more than a “temporary slump in a fundamentally strong economy” and that government intervention to combat its baneful effects was both “unnecessary and unwise.”  Stubbornly, he refused to act.  Vilified over the years for his failure to act, perhaps rightly so, President Hoover believed that relief should come from the private sector, not the government.

As a result, a capitalist system which denied work or relief to the unemployed millions was increasingly called into critical doubt.  But rugged individualism was dead nonetheless.  Both real estate and farm commodity prices had collapsed.  Banks effectively ceased to operate.  While the heart of industry was only beating faintly, the private sector offered nothing.  It had failed.  The 1932 election would provide a last chance for politics.

(Editor’s note:  The second and middle segment in this three part series introduces readers to President Franklin D. Roosevelt, the plight of the vanquished and the creation of a new order, which the ordinary citizen has come to know as F.D.R.'s “New Deal” with its accompanying social safety net.)

-Michael D'Angelo

Thursday, June 6, 2013

An Independent Voice

"... swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism." Is that what the promised land of America has become? ...

An independent voice is not charged with engagement in a popularity contest. Since it is not owned, an independent voice has no obligation to maintain neutral positions on important issues for the sake of parity. The charge is to answer the following question: Which is the correct position? Theodore Roosevelt once reflected that
Personally I have not the slightest sympathy with debating contests in which each side is arbitrarily assigned a given proposition and told to maintain it without the least reference to whether those maintaining it believe in it or not.  I know that under our system this is necessary for lawyers, but I emphatically disbelieve in it as regards general discussion of political, social and industrial matters.  What we need is to turn out of our colleges young men with ardent convictions on the side of the right; not young men who can make a good argument for either right or wrong as their interest bids them.  There is no effort to instill sincerity and intensity of conviction.  On the contrary, the net result is to make the contestants feel that their convictions have nothing to do with their arguments. 

Today, many of the positions of one of the two major national political parties are to such an extreme, out of touch with mainstream reality, that moderate voices within the party like Bob Dole and Olympia Snowe say it should “close for repairs.” Can an independent voice be fairly accused of a fatal bias or undue influence in favor of the other party for consistently bringing out the same point?

What does an independent voice sound like? And not sound like?

Take the example of an Exxon executive, dependent upon the company’s fortunes. Would that executive be the optimal source from whom to get an objective handle on the public environmental safety considerations of fracking, absent empirical proof? Or whether Canadian Tar Sands oilfields should be developed for US consumption through the mechanism of the Keystone Pipeline? Take another example of the entrepreneur, who happens to deploy outsourced human labor in far away factories to “make a living” here in the US. Is this the ideal critic of the bottom line performance of the Obama administration's policies on domestic jobs creation? Or the pace of economic recovery, which historically depends upon the mass purchasing power of the ordinary citizen?

Commercial allegiances aside, can a political party influence an independent voice, thus negating it? In answering this question, would it be helpful to know whether the individual behind the voice is employed by or otherwise beholden to party due to considerations of position or patronage?  Would it also be helpful to know whether the party’s influential ideas have been de-commissioned for over a century?

What is the essence of an independent voice? Does it not tow its own direction on the path less traveled? Perhaps the views of a political party which happen to be in alignment merely strengthen the validity of a position taken. And on issue upon issue, if it seems to turn out that way consistently, perhaps it is not an independent voice which is biased but rather the bankruptcy of the other party's views. Do we sometimes mistake the difference?

Where do our beliefs come from? Is the pursuit of happiness genuinely concerned with helping people first? Or does self-government have some other primary calling? Was the ordinary citizen placed upon the earth to collect things and change money? Or to serve?  America cherishes a storied tradition of individual initiative, incentive based. But doesn’t our political creed hold out the promise of such things only in the larger context of a collective social identity - that we are all in this together? How about the psychology of support for the weakest link?

Unbridled selfishness, ambition and greed are necessary ingredients to unlock the fantastic material successes of capitalism.  They also expose the darker side of human nature, personal achievement and private reward notwithstanding. More than a hundred years ago, T.R. understood that the “Material progress and prosperity of a nation are desirable chiefly so long as they lead to the moral and material welfare of all good citizens.”

But what happens when purely business or political decisions clash with considerations of morality? Does business utilize a moral compass? Are the twin pillars of "continuous responsibility of government for human welfare" and stewardship of the environment, especially "efficient use of finite resources and scientific management of renewable ones," merely expenses on a cold financial balance sheet for private gain?

Notions of rugged individualism pretty much went out with the Great Depression of 1929, until President Reagan resurrected that nostalgic notion in the 1980s. But here we are in the 21st century, our national life, T.R. having forewarned, “bringing nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism.” It is here that an independent voice cannot forever remain silent.

Weren't material possessions conceived to serve us? Then why does it appear that we are enslaved to them? Are we both daring and foolish enough to consider a more sanguine approach? If in T.R.’s words the “conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress,” then is it yet time for a new epoch in American history?

-Michael D’Angelo